Biogroup - comment

BioGroup’s conference call yesterday had no impact on trading levels or the credit story, but did provide some incremental information. Guidance was reiterated, with trading continuing ahead of budget. The key discussion was around French pricing, where the currently discussed +1.7% net tariff envelope would be slightly better than management’s BP, which assumes c.2.5% annual price declines. With c.3.5% volume growth, the 1.7% envelope would imply c.1.8% pricing pressure. Management expects further clarity on the negotiations by the end of October, so the outcome remains uncertain.